Professional Documents
Culture Documents
Introduced after repulsion of FERA, an Act to control, regulate, restrict or prohibit foreign exchange keeping in view the interest of economic development of the country
Notifications/Regul ations
Notifications/Rules
Master Circular
Description of Sections
Chapters I II III IV V VI VII Matters Preliminary, Preamble and Definitions Regulation and management of Foreign Exchange Authorised Person Contravention and Penalties Adjudication and procedure for appeal Directorate of Enforcement Miscellaneous Provisions Sections 1-2 3-9 10-12 13-15 16-35 36-38 39-49
Residential Status
Residential Status
Section 2(v) "person resident in India" means:(i) a person residing in India for more than one hundred and eighty-two days during the course of the preceding financial year but does not include:A) a person who has gone out of India or who stays outside India, in either case:-
Residential Status
(B) a person who has come to or stays in India, in either case, otherwise than (a) for or on taking up employment in India, or
Example
Mr Z had resided in India during the financial year 19992000.He left India on 1st August,2000 for united states for pursuing higher studies for 3 Years .What would be his residential status during financial year 2000-2001 and during 2001-2002.
Toy is an Japanese company having several business units all over the world. It has a robotic unit with its head quarter in Mumbai and has a branch in Singapore. Headquarter at Mumbai controls the branch of robotic unit. What would be the residential status of robotic unit in Mumbai and that of Singapore Branch?
Example
Miss is an air-hostess with the British Airways. She flies for 12 days in a month and thereafter a break for 18 days. During the break, she is accommodated of base which is normally the city where the airways is headquartered. However ,for security consideration ,she was based on Mumbai. During the financial year ,she was accommodated at Mumbai for more than 182 days. What would be her residential status under FEMA?
As per notification no.FEMA1/2000-RB dated 3rd May 2000 no person shall undertake or sell or draw FOREX to or from an authorised person for any capital account transaction except for the purposes specified in Schedule I and Schedule II
Loans and overdrafts (borrowings) by a person resident in India from a person resident outside India;
Maintenance of foreign currency accounts in India and outside India by a person resident in India; Taking out of insurance policy by a person resident in India from an insurance company outside India; Loans and overdrafts by a person resident in India to a person resident outside India; Remittance outside India of capital assets of a person resident in India;
Holding, owning, transferring or investing in foreign currency, foreign security or any immovable property outside India by a person resident in India if the same was acquired, held or owned by such person when he was resident outside India or inherited from a person who was resident outside India. Holding, owning, transferring or investing in Indian currency, security or any immovable property in India by a person resident outside India if the same was acquired, held or owned by such person when he was resident in India or inherited from a person who was resident in India.
Prohibited transactions
As per the notification Drawal of Foreign Exchange is prohibited in following Cases
Cultural Tours
Ministry of Human Resources Development, (Department of Education and culture) Advertisement in foreign print Ministry of Finance, media exceeding USD 10,000) (Department of Economic Affairs) Remittance of prize e money / Ministry of Human Resources sponsorship of sports activity Development (Department of abroad by a person other than Youth Affairs and Sports) International / National / State Level sports bodies, if the amount involved exceeds USD 100,000.
Explanation: For the purpose of this item, a person resident in India on account of his employment or deputation of a specified duration ; the duration of which does not exceed three years, is a resident but not permanently resident
Commission, per transaction, to agents abroad for sale of residential flats or commercial plots in India exceeding USD 25,000 or 5% of the inward remittance whichever is more
Remittance exceeding USD 1,000,000 per project, for any consultancy service procured from outside India. Remittance exceeding USD 100,000 by an entity in India by way of reimbursement of pre incorporation expenses.
Liberalised Remittance
Authorised Dealers may freely allow remittances by resident individuals up to USD 200,000 per financial year for any permitted current or capital account transactions or a combination of both. This limit includes remittance towards gift and donation by a resident individual. Remittances under the scheme are allowed only in respect of permissible current or capital account transaction.
BANK ACCOUNTS
The accounts may be maintained in the form of savings or current or term deposit accounts.
Remittance outside India of current income like rent, dividend in India of the account holder Remittance up to USD one million, per financial year for all bonafide purposes to the satisfaction of the authorised dealer.
Transfer from other NRE/FCNR Transfer to NRE/FCNR accounts account of the account holder Refund when permissible Investment in shares / payment was made from same Securities / commercial paper account of an Indian company of for purchase of immovable Maturity proceeds of property in India. Government Securities including National Plan etc.
Proceeds of foreign currency by account holder during his temporary visit to India
FCNR Account
FCNR A/c: These accounts can be opened in four foreign currencies: Pounds Sterling;
US Dollars;
Japanese Yen; Euro. For the purpose of opening an account, remittance in foreign exchange, in the same currency, should be received in India Can be opened only as fixed deposits Principle and interest - remittable outside India Permissible debits and credits are same as NRE account.
Received as pension or any other superannuation or any other monetary benefit from employer outside India
Realised on conversion of asset Received or acquired as gift or inheritance Received as the proceeds from life insurance policy settled in Foreign currency
acquired by him from an authorised person for travel abroad and represents the unspent amount thereof.
acquired by him, while on visit to any place outside India, by way of payment for services.
acquired by him, from any person not resident in India and who is on visit to India, as honorarium, gift, for services rendered abroad
Acquired by him in settlement of any lawful obligation from any person not resident in India.
Contravention of FEMA
Any person, contravening FEMA, adjudication, to a penalty up to shall be liable, upon
three times the sum involved in such contravention, where such amount is quantifiable, up to Rupees Two hundred thousand, where the amount is not quantifiable. In addition, where such contravention is a continuing one, the person will be liable to further penalty, which may extend to Rupees Five thousand for every day after the first day, during which the contravention continues.
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